v2.4.0.6
Note 4 Shareholders' Equity
 3 Months Ended
Jun. 30, 2012
Note 4 Shareholders' Equity:  
Note 4 Shareholders' Equity

NOTE 4 SHAREHOLDERS’ EQUITY

 

Each share of the Company’s amended Series D Preferred Stock (the "Series D Shares") may be converted by the holder into Company common stock at a rate equal to one divided the volume weighted average market price for the Company’s common stock for the 90 days prior to conversion; provided, however, that no holder of the Series D Shares may receive common shares upon conversion in an amount which would cause the holder to own in excess of 4.9% of the Company’s issued and outstanding shares. The holder of Series D Shares may cast the number of votes at a shareholders meeting or by written consent that equals the number of common shares into which the Series D Shares are convertible on the record date for the shareholder action. In the event the Board of Directors declares a dividend payable to Company common shareholders, the holders of Series D Shares will receive the dividend that would be payable if the Series D Shares were converted into Company common shares prior to the dividend. In the event of a liquidation of the Company, the holders of Series D Shares will receive a preferential distribution of $0.001 per share, and will share in the distribution as if the Series D Shares had been converted into common shares.  Series D Shares were amended April 16, 2012.

 

The Company’s Series E Preferred Stock (the “Series E Shares”) was authorized during 2009 in connection with a financing which was cancelled prior to closing. The Company accordingly entered into an agreement in April 2010 to confirm the cancelation of the Series E Shares, which agreement called for the issuance of a total of 50,000 Company common shares and the retention of another 18,690 common shares previously issued to the relevant investors in anticipation of converting Series E Shares. Minority Interest Fund (II), LLC (“MIF”) settled the Company’s obligation by assigning Company common shares to the former holders of the Series E Shares. MIF subsequently, on September 30, 2011, entered into an agreement with the Company pursuant to which MIF agreed to release the Company from any and all claims as of such date, including any claims pertaining to MIF’s discharge of the amounts due to the former holders of the Series E Shares, in exchange for 46,483 Series D Shares. All Series E Shares have been consequently cancelled. The 50,000 common shares that were to have been issued to the relevant investors were previously recorded as liabilities due to be settled in stock and were valued as of the April 15, 2010 commitment date. The associated liability has been deemed fully satisfied in accordance with the assignment and release by MIF noted above.

 

Shares of the Company’s Series F Preferred Stock (the "Series F Shares") may be converted by the holder into Company common stock at a rate representing 80% of the fully diluted outstanding common shares outstanding after the conversion (which includes all common shares outstanding plus all common shares potentially issuable upon the conversion of all derivative securities not held by the holder).  Series F Shares may be converted into Common Shares at the option of the holder at any time after December 31, 2012. In the event that the Company files a registration statement with the Securities and Exchange Commission on Form S-1, the Series F Shares shall be automatically converted into Common Shares in accordance with the conversion ratio described above. The holder of Series F Shares may cast the number of votes at a shareholders meeting or by written consent that equals the number of common shares into which the Series F Shares are convertible on the record date for the shareholder action. In the event the Board of Directors declares a dividend payable to Company common shareholders, the holders of Series F Shares will receive the dividend that would be payable if the Series F Shares were converted into Company common shares prior to the dividend. In the event of a liquidation of the Company, the holders of Series F Shares will receive a preferential distribution of $0.001 per share, and will share in the distribution as if the Series F Shares had been converted into common.

 

In connection with an acquisition on April 25, 2012 (see Note 7, Acquisition, below), Viridis Capital, LLC (“Viridis”), the Company’s former majority-shareholder, agreed to exchange 100% of its beneficial ownership interest in the Company, which previously corresponded to about 80%% of our capital stock, for 75,000 Series D Shares.  In addition, 795,845 Series D Shares were issued to CleanTech Fuels, Inc. (“CTF”) in exchange for full satisfaction of financing previously provided to the Company. The Series D Shares issued to Viridis and CTF are convertible into 7.44% of our capital stock. Viridis and CTF agreed that neither company would sell any common shares issued upon conversion of the Series D Shares at a rate greater than 5% of the then-current average daily trading volume for the Company’s common stock. The Viridis and CTF agreements are both subject to satisfaction of certain conditions subsequent, including the receipt by each party of applicable third party consents. The Company additionally entered into an agreement with MIF on April 27, 2012, pursuant to which the Company agreed to issue MIF 484,615 Series D Shares in connection with the restructuring of certain convertible debentures previously purchased by MIF from the Company for cash consideration (see Note 6, Convertible Debentures, below). On May 23, 2012, the Company entered into an agreement with MIF pursuant to which MIF agreed to cancel 124,615 of these shares in connection with the Company’s planned merger transaction with its wholly owned subsidiary, Oxysonix Corporation (see Note 9, Subsequent Events, below).  A total of 300,000 of Series D Shares were issued during the three months ended June 30, 2012, and the 60,000 remaining shares issuable to MIF under its April 27, 2012 agreement with the Company were issued in July 2012.

 

Series D Shares were converted into 643,999,808 common shares during the six months ended June 30, 2012. In addition, Viridis cancelled 1,640,000,000 common shares in exchange for 30,552 shares of Series D preferred stock during the first quarter of 2012. In addition, the Company issued 232,000,000 shares to E-LionHeart Associates upon the conversion of $21,500 in debt; 196,500,000 shares to Long Side Ventures upon the conversion of $10,760 in debt; 400,000,000 shares to Mammoth Capital upon the conversion of $40,000 in debt and 200,000,000 to a former employee as a partial reduction of accrued compensation.